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Is there such a thing as repressed memories? Suppose a person undergoes a traumatic event (e.g failing out of school, having a relative die suddenly). Is it normal for the person to act as if everything is normal? Do the traumatic events have an affect on someone even if they dont think about it every day?

You're mixing a few things together there. What do you mean by repressed memory? Do you mean that they really cannot recall at all what happened? Or do you mean that they're just not discussing it or acting like it affected them?
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JohnAug 3 '13 at 0:14

1 Answer
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hippocampus
The hippocampus processes declarative memory, the memory recalled in the form of thought and stores memory.

Hippocampal integrity plays a crucial role in intact memory functioning. Research has demonstrated that normal hippocampal development continues into early adulthood . Investigators specifically examining the development of the hippocampus have suggested that the hippocampal formation undergoes a steep increase in volume until approximately the second year of life, then the volume slowly increases throughout adolescence. 1

amygdala
The amygdala processes emotional memory by directing the stimulus to emotional.

here is extensive evidence that the amygdala is involved in affectively influenced memory. The central hypothesis guiding the research reviewed in this paper is that emotional arousal activates the amygdala and that such activation results in the modulation of memory storage occurring in other brain regions.
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development of amygdala and hippocampus
The hippocampus and amygdala are not fully developed until the ages of 9-11 years of age. there is evidence in studies that this development continues into early adulthood

significant age-related changes in the volumes of amygdala and hippocampus. The developmental trajectories of the brain regions were best characterized by the cubic model, which demonstrated robust changes in the beginning of life, with the amygdalar and hippocampal volumes peaking around 9 to 11 years of age,..
The results of the present study indicated that the maximum volume of the amygdala was reached between 9 and 11 years of age. 3

The amygdala is able to effective process emotional memory, independently of attention.

The question addressed in this paper is whether the human amygdala processes threat-related stimuli independent of selective attention. This is considered from a functional neuroimaging perspective, describing studies in normal volunteers and patients with brain lesions. The conclusion is that the evidence for such automaticity is strong, indicating that important distinctions exist between emotion and other forms of cognition 4

The hippocampus, requires attention to process and recall memory.

The hippocampus is critically involved in storing explicit memory such as memory for space. A defining feature of explicit memory storage is that it requires attention both for encoding and retrieval. 5

In conclusion:
As the parts of the brain that process memory are forming during the early years of life, given that emotional memory is more readily processed than declarative memory. It is possible to have experiences within the emotional memory, that have not got clear cut conscious memories.
This post about involuntary memory, discusses memory retrieval in a little more detail.